Pell Grants Safe in Year-End Budget

Democrats predicted final approval this week of a year-end budget compromise ceding major leverage to Republicans in future battles but also giving the White House added protection for Pell Grants for low-income college students.Filed late Sunday in the Senate after weekend talks, the measure is still subject to a 60-vote cloture test Tuesday. But Majority Leader Harry Reid (D-Nev.) appeared confident that the stripped-down, 36 page-bill will be quickly sent onto the House.

Government agencies would remain dependent on temporary funding through March 4 – a formula that freezes most spending at 2010 levels for the next 10 weeks and guarantees Republicans a chance to force more cuts once the GOP takes control the House and its Appropriations Committee in January.

After a late-breaking drive, the White House won an exception for the Pell program to avert what could be a one-third cut from the maximum per-student grant authorized for the 2011-12 college year.

Those receiving such aid are overwhelmingly students from families earning under $40,000 annually, and as demand has grown with the recession, Pell faces an estimated $5.7 billion shortfall. The White House failed to address this last spring, and projections since have only gotten worse: it’s now estimated that unless money is found, the maximum grant – slated to be $5,550 – will be trimmed to $3,710, an $1,840 reduction.

“We have tried repeatedly to address Pell and will continue to press the case,” Jack Lew, the White House budget director, told POLITICO.

Elsewhere, an estimated $459 million has also been added to prevent the layoffs of claims processors at the Veterans Benefits Administration, and prior agreements impacting aid to Pakistan and the Mideast and funding for the National Nuclear Security Administration’s weapons program are extended.

The last is important to the ongoing Senate START debate. To help offset these cumulative costs the bill claims billions in savings from the Census and the BRAC military base commission – two accounts which received big increases in 2010 but no longer need the money in 2011.

When all the puts-and-takes are added up, the Senate Appropriations Committee estimates that the rate of spending for the 10 weeks until March 4 would be about $1.6 billion above the government’s 2010 appropriations.

Once agreed upon, the budget deal is also an engine to pull other legislation. Negotiators were strict in narrowing these items, but in a closely watched fight for shipyard workers in Michigan, Wisconsin and Alabama, the Navy won language allowing it to shed its typical “winner-takes-all” strategy and pursue two competing-but-attractive bids on its LCS (Littoral Combat Ships).

Austal, an Australian shipbuilder partnered with General Dynamics in Mobile Ala., is one contractor; Lockheed Martin, the second, working from a shipyard in Marinette, Wis., – near the border of Michigan and important to hard-hit areas in both Midwest states.

The Navy needed the fix for fear the bid prices would expire at the end of this month and Senate Armed Services Committee Chairman Carl Levin (D-Mich.) was a powerful ally. But it could still face protests from his ranking Republican, Sen. John McCain (R-Ariz.).

There’s little room to spare for more fights right now under Reid’s tight schedule.

Indeed, the Tuesday cloture vote will come the same as the current stop-gap spending bill for the government is due to expire-the latest shutdown deadline. The House will also return Tuesday, and the hope is that all sides will have grown weary by then of the relentless brinkmanship.